BRUSSELS, Sept 5 (Reuters Point Carbon) - The EU agreed to a
deal late Wednesday to scale back its law regulating carbon from
flights as U.N. negotiators pledged to craft a global pact on
aviation emissions that would not take effect for seven years.

EU officials agreed at U.N. talks in Montreal to only
include emissions from flights over European airspace in the
bloc's Emissions Trading Scheme (ETS), said the EU's top climate
official Jos Delbeke, a move that would scale down a law that
covers all flights to and from Europe.

The deal, which still needs to be signed off by a full
meeting of the U.N.'s aviation body ICAO ending Oct. 4 and by EU
lawmakers, drew fire from green groups and sparked a renewed
threat of legal action by European airlines.

"There are bits and pieces of that text that make everybody
unhappy. So it's maybe not too far away from an ideal
compromise," said Delbeke at an event at the EU Parliament in
Brussels.

The deal falls short of the worldwide pact the EU had hoped
for in November 2012 when it exempted foreign flights for one
year to give ICAO more time to strike a global deal and avert a
global trade war from major trading partners such as China,
India, and the U.S. that said the measure infringed on their
sovereignty.

The agreement will force airlines to surrender more permits
for carbon dioxide (CO2) emissions than the current temporary
practice of regulating domestic EU flights, boosting permit
demand to 80 million to 2020 from 48 million, Point Carbon
analysts said this week.

Bill Hemmings from the environmental group T&E said the move
was an "unnecessary concession" that had little to do with
efforts to tackle climate change and did not amount to a
guarantee that ICAO would tackle aviation emissions globally.

"This is appeasement on a grand scale. How can it be that
the future of EU policy in this sector can be decided behind
closed doors by 40 faceless men and a few women in Montreal?" he
told the Brussels event.

Peter Liese, a senior member of the EU Parliament, said the
assembly needed to scrutinize the plan further but hinted that
it may have to accept the measure as the best possible
compromise.

"It is far from an ideal solution... (but) I'm really
concerned that if we just oppose what is on the table then we
may see a total collapse of our effort," said Liese.

He said the Parliament might propose to merely to extend its
suspension the global reach of the EU ETS rather than re-working
its law permanently.

"Personally I would not be ready to give another blank
cheque to ICAO and say if they don't agree in 2016 we just look
at it then," he added, referring to when the U.N. body has
pledged to finalise the global deal.
LEGAL THREAT

The EU Parliament and member states would have to agree to
the new law by early next year to prevent an automatic
resumption of existing legislation.

But this could re-start a legal case from the European Low
Fares Airline Association (ELFAA) over fears it will distort
competition, said John Hanlon, secretary-general of the group.

"We will be watching very closely... If (the deal) is not
going to deliver what we have a right to expect, we will
reactivate that suit," said Hanlon.

ELFAA represents some of Europe's biggest carriers including
Easyjet and Ryanair and believes its members face discrimination
under an EU-only scheme versus carriers with dominant business
outside Europe.
(Reporting by Ben Garside)